For more information, read Frictional Expenses - The Hidden Investment Tax. You can also see how spreads hurt bond investors a lot in How Bond Spreads Hurt Investors. The spread is how the market maker makes his money.
What Is the Spread?
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The spread represents the difference between the ask and the buy price. It is the profit for the market maker at the stock exchange that took on the risk of filling an order with his or her own company's money. The smaller the spread, the better for you.
Don Carstens, Getty ImagesMore About Spreads
Frictional Costs - The Hidden Investment TaxHow Bond Spreads Hurt Bond InvestorsMarket Makers and How They Make Money
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